Exhibit 10.26
15
REVOLVING LOAN AGREEMENT
THIS AGREEMENT is entered into as of the 31st day of May, 2000 between
Surgical Laser Technologies, Inc., a Delaware corporation (the "Borrower") and
AmSouth Bank, having its principal place of business in Tuscaloosa County,
Alabama (the "Bank").
Recitals
A. The Borrower has applied to the Bank for a term revolving line of credit
in the principal amount of Three Million and No/100 ($3,000,000.00) Dollars to
provide for working capital considerations.
B. The Bank has agreed to make such loan on the terms, conditions and
agreements hereinafter set forth.
Agreement
NOW THEREFORE, in consideration of the recitals and the covenants and
agreements hereinafter set forth, and of other valuable considerations, the
Borrower and the Bank hereby agree as follows:
Article I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Defined Terms.
As used in this Agreement, the following terms have the following meanings
(terms defined in the singular to have the same meaning when used in the plural
and vice versa):
"Actual/360 Basis" means a method of computing interest or other charges
hereunder on the basis of an assumed year of 360 days for the actual number of
days elapsed, meaning that interest or other charges accrued for each day will
be computed by multiplying the rate applicable on that day by the unpaid
principal balance (or other relevant sum) on that day and dividing the result by
360.
"Affiliate" means any Person (1) which directly or indirectly controls, or
is controlled by, or is under common control with the Borrower or a Subsidiary;
(2) which directly or indirectly beneficially owns or holds five percent (5%) or
more of any class of voting stock of the Borrower or any Subsidiary; or (3) five
percent (5%) or more of the voting stock of which is directly or indirectly
beneficially owned or held by the Borrower or a Subsidiary. The term control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract, or otherwise.
"Agreement" means this Revolving Loan Agreement, as amended, supplemented,
or modified from time to time.
"Assessment Rate" means any assessment rate required to be paid by the Bank
from time to time to the Federal Deposit Insurance Corporation (or any
successor) for the insurance provided by such corporation (or any successor) of
the Bank's time deposits in the United States; any changes in the Assessment
Rate shall be effective immediately and shall result in an automatic adjustment,
on and as of the effective date of any such change, in the LIBOR-based Rate.
"Business Day" means any day other than a Saturday, Sunday, or other day on
which commercial banks in Tuscaloosa, Alabama are authorized or required to
close by law.
"Capital Lease" means all leases which have been or should be capitalized
on the books of the lessee in accordance with GAAP.
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"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations and published interpretations thereof.
"Collateral" means all property which is subject or is to be subject to the
Lien granted by the Security Documents.
"Commitment" means the Bank's obligation to make Loans to the Borrower
pursuant to Section 2.01 in the amount referred to therein.
"Commonly Controlled Entity" means an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of Section
414(b) or 414(c) of the Code.
"Debt" means (1) indebtedness or liability for borrowed money; (2)
obligations evidenced by bonds, debentures, notes, or other similar instruments;
(3) obligations for the deferred purchase price of property or services (but
excluding trade obligations to the extent maturing in twelve (12) months or
less, and current accrued liabilities); (4) obligations as lessee under Capital
Leases; (5) current liabilities in respect of unfunded vested benefits under
Plans covered by ERISA; (6) obligations under letters of credit; (7) obligations
under acceptance facilities; (8) all guaranties, endorsements (other than for
collection or deposit in the ordinary course of business), and other contingent
obligations to purchase, to provide funds for payment, to supply funds to invest
in any Person or entity, or otherwise to assure a creditor against loss; and (9)
obligations secured by any Liens, whether or not the obligations have been
assumed.
"Default" means any of the events specified in Section 8.01, whether or not
any requirement for the giving of notice, the lapse of time, or both, or any
other condition, has been satisfied.
"Eligible Accounts Receivable" means those accounts receivable that are
ninety (90) days or less in past due maturity.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published interpretations
thereof.
"Event of Default" means any of the events specified in Section 8.01.
"GAAP" means generally accepted accounting principles in the United States.
"Governmental Authority" means any federal, state, county or municipal
agency, authority, department, commission, bureau, board or court.
"Governmental Requirements" means all laws, rules, ordinances, judgments,
decrees, codes, and orders of any Governmental Authority applicable to the
Borrower, any Guarantor or any of the Collateral.
"Gross Cash Flow" means the aggregate amount of all net income plus
depreciation, amortization and all other non-cash expenses generated by the
Project during a certain period.
"Index" means the average offered rate in the London interbank market for
deposits in United States dollars for thirty (30), sixty (60), ninety (90), or
one hundred and eighty (180) days as published in the Wall Street Journal or
such comparable financial information reporting service used by the Bank at such
time such rate is determined.
"Liabilities" means (i) the indebtedness evidenced by the Note, and all
interest thereon and any and every extension, renewal and modification thereof
and all costs, expenses and charges payable with respect to the Loan Documents;
and (ii) the representations, warranties and conditions contained in the Loan
Documents.
"LIBOR-Based Rate" means the floating interest rate plus the Margin as
calculated pursuant to Section 2.04 of this Agreement.
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"Lien" means any pledge, security interest, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), or preference,
priority, or other security agreement or preferential arrangement, charge, or
encumbrance of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of any financing statement under the Uniform Commercial Code or comparable law
of any jurisdiction to evidence any of the foregoing).
"Loan" shall have the meaning assigned to such term in Section 2.01.
"Loan Documents" means this Agreement, the Note, the Security Agreement,
the Commitment letter dated May 18, 2000, and all other documents now or
hereafter executed or delivered in connection with Loan or any of the foregoing
documents, or to evidence or secure the Loan, and all amendments thereto.
"Margin" means the amount which is added to the Index to derive the
Interest Rate, which amount shall equal two and one quarter percent per annum
(2.25%).
"Multi-employer Plan" means a Plan described in Section 4001(a)(3) of
ERISA.
"Note" shall have the meaning assigned to such term in Section 2.06.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
governmental authority, or other entity of whatever nature.
"Plan" means any pension plan which is covered by Title IV of ERISA and in
respect of which the Borrower or a Commonly Controlled Entity is an "employer"
as defined in Section 3(5) of ERISA.
"Principal Office" means the Bank's office at 0000 Xxxxxxxxxx Xxxxxxxxx,
Xxxxxxxxxx, Xxxxxxx 00000.
"Prohibited Transaction" means any transaction set forth in Section 406 of
ERISA or Section 4975 of the Code.
"Reportable Event" means any of the events set forth in Section 4043 of
ERISA.
"Security Agreement" means the security agreements required to be delivered
by the Borrower to secure any of the Collateral under the terms of this
Agreement.
"Security Documents" means the Security Agreements and any other documents
and agreements now or hereafter securing, guaranteeing or relating to the Loan.
"Subsidiary" means, as to the Borrower, a corporation of which shares of
stock having ordinary voting power (other than stock having such power only by
reason of the happening of a contingency) to elect a majority of the board of
directors or other managers of such corporation are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by the Borrower.
"Termination Date" means the 31st day of May, 2003.
Section 1.02. Accounting Terms.
All accounting terms not specifically defined herein shall be construed in
accordance with GAAP consistent with those applied in the preparation of the
financial statements referred to in Section 4.04, and all financial data
submitted pursuant to this Agreement shall be prepared in accordance with such
principles.
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Article II
AMOUNT AND TERMS OF THE LOANS
Section 2.01. Revolving Credit.
The Bank agrees on the terms and conditions hereinafter set forth, to make
loans (the "Loan") to the Borrower from time to time during the period from the
date of this Agreement up to but not including the Termination Date in an
aggregate principal amount not to exceed at any time outstanding Three Million
and No/100 Dollars ($3,000,000.00), as such amount may be reduced pursuant to
Section 2.02 (the "Commitment"). The Loan, or a portion thereof, may be repaid
and re-borrowed, and repaid re-borrowed, pursuant to the procedures, terms and
conditions of the Note and this Agreement.
Section 2.02. Reduction of Commitment.
The Borrower shall have the right, upon written notice to the Bank, to
terminate in whole or reduce in part the unused portion of the Commitment,
provided that no reduction shall be permitted if, after giving effect thereto,
and to any prepayment made therewith, the outstanding and unpaid principal
amount of the Loans shall exceed the Commitment. The Commitment once reduced or
terminated may not be reinstated.
Section 2.03 Notice and Manner of Borrowing.
The Borrower shall give the Bank written notice, which notice may be
delivered by facsimile, of any advances under this Agreement, specifying the
amount thereof. Not later than 2:00 p.m. central time on the date of such
advance and upon fulfillment of the applicable conditions set forth in Article
III, the Bank will make such advance available to the Borrower in immediately
available funds by crediting the amount thereof to the Borrower's account with
the Bank.
In no event shall the cumulative Loan advances exceed one hundred percent
(100%) of the cash collateral pursuant to Section 2.10 plus eighty percent (80%)
of Eligible Accounts Receivable, provided, however, that in no event shall
cumulative Loan advances exceed the Commitment amount, whichever is the lesser.
Section 2.04. Interest.
The Loan shall bear a floating rate of interest on an Actual/360 Basis
which rate shall be calculated by adding the Margin to the Index. The Borrower
shall notify the Bank in writing which Index the Bank shall apply, namely the
thirty (30), sixty (60), ninety (90) or one hundred eighty (180) day average
offered rate in the London interbank market for deposits in United States
dollars as published in the Wall Street Journal or such other comparable
financial information reporting service used by the Bank at the time such rate
is determined.
Section 2.05. Origination.
The Borrower agrees to pay to the Bank an origination fee equal to one
quarter of one percent (1/4 of 1%) of the Loan amount.
Section 2.06. Note.
The Loan shall be evidenced by a Master Note For Business And Commercial
Loans (the "Note") payable to the order of the Bank, duly executed by the
Borrower, dated the date of this Agreement in the principal amount of Three
Million and No/100 Dollars ($3,000,000.00), bearing interest on amounts advanced
and outstanding thereunder from the date of advance until paid at the rate per
annum as set forth therein.
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Section 2.07. Prepayment.
The Borrower may prepay the indebtedness outstanding, or any portion
thereof, at any time, without penalty.
Section 2.08. Method of Payment.
Payments of principal and interest on the Note shall be due and payable as
follows:
(a) Commencing on the 5th day of July, 2000, and continuing on the same day
of each successive month thereafter, up to and including the Termination Date, a
payment of interest on the then outstanding principal balance of the Note shall
be payable, with such amount of monthly interest calculated pursuant to the
terms of the Note.
(b) On the Termination Date, the entire outstanding principal balance of
the loan together with all accrued and unpaid interest and any fees and expenses
which may have been added pursuant to this Agreement or the Loan Documents shall
be due and payable in full, which payment shall be a balloon payment.
The Borrower shall make each payment under this Agreement and under the
Note not later than 2:00 p.m. (Central time) on the date when due in lawful
money of the United States to the Bank at its Principal Office in immediately
available funds. The Borrower hereby authorizes the Bank, if and to the extent
payment is not made when due under this Agreement or under the Note, to charge
from time to time against any account of the Borrower with the Bank any amount
so due. Whenever any payment to be made under this Agreement or under the Note
shall be stated to be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of the payment of interest and the
commitment fee, as the case may be.
Section 2.09. Use of Proceeds.
The proceeds of the Loan hereunder shall be used by the Borrower for
working capital accommodations and general corporate purposes. The Borrower will
not, directly or indirectly, use any part of such proceeds for the purpose of
purchasing or carrying any margin stock within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System or to extend credit to any
Person for the purpose of purchasing or carrying any such margin stock, or for
any purpose which violates, or is inconsistent with, Regulation X of such Board
of Governors.
Section 2.10. Collateral.
As security for the Loan, the Borrower shall execute and deliver to the
Bank at closing such security agreements, pledge agreements and UCC-1 financing
statements on forms acceptable to the Bank, granting to the Bank, among other
things, a first priority lien on all business assets, including, but not limited
to, accounts receivable, equipment, inventory, patents and other general
intangibles as the Bank may require. In addition, the Borrower shall pledge in
the form of an investment account at AmSouth Bank, pursuant to an Investment
Property Control Agreement acceptable to the Bank, Two Million and No/100
Dollars ($2,000,000.00) in cash or cash equivalents.
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Article III
CONDITIONS PRECEDENT
Section 3.01. Condition Precedent to Loan.
The obligation of the Bank to make the Loan to the Borrower is subject to
the condition precedent that the Bank shall have received on or before the day
of such Loan each of the following, in form and substance satisfactory to the
Bank and its counsel:
(1) Note. The Note duly executed by the Borrower;
(2) Security Documents. Security Documents, including, but not limited to
security agreements, investment property control agreements, and pledge
agreements duly executed by the Borrower together with (a) acknowledgment copies
of the Financing Statements (UCC-1) duly filed under the Uniform Commercial Code
of all jurisdictions necessary or, in the opinion of the Bank, desirable to
perfect the security interest created by the Security Agreement, and (b)
certified copies of Request for Copies or Information (Form UCC-11) identifying
all of the financing statements on file with respect to the Borrower in all
jurisdictions referred to under (a), including the Financing Statement filed by
the Bank against the Borrower, indicating that no party claims an interest in
any of the Collateral;
(3) Evidence of all corporate action by the Borrower. Certified (as of the
date of this Agreement) copies of all corporate action taken by the Borrower,
including resolutions of its Board of Directors acting through its Executive
Committee, authorizing the execution, delivery, and performance of the Loan
Documents to which it is a party and each other document to be delivered
pursuant to this Agreement;
(4) Incumbency and signature certificate of the Borrower. A certificate
(dated as of the date of this Agreement) of the Secretary of the Borrower
certifying the names and true signatures of the officers of the Borrower
authorized to sign the Loan Documents to which it is a party and the other
documents to be delivered by the Borrower under this Agreement;
(5) Opinion of counsel for the Borrower. A favorable opinion of counsel for
the Borrower, in substantially the form as the Bank may reasonably request;
(6) Borrowing Base Certificate and Aged Accounts Receivable. A completed
Borrowing Base Certificate in form acceptable to the Bank with a copy of the
current accounts receivable aging required therein.
Section 3.02. Conditions Precedent to Make Advances.
The obligation of the Bank to make advances on the Loan shall be subject to
the further conditions precedent that on the date of such advance:
(1) The following statements shall be true and the Bank shall have received
monthly a Borrowing Base Certificate in a form acceptable to the Bank (with
attached a copy of the then current accounts receivable aging schedule) signed
by a duly authorized officer of the Borrower, stating that
(a) The representations and warranties contained in Article IV of this
Agreement, and by any security documents or loan document, are correct
on and as of the date of such draw as though made on and as of such
date; and
(b) No Default or Event of Default has occurred and is continuing, or
would result from such draw; and
(2) The Bank shall have received such other approvals, opinions, or
documents as the Bank may reasonably request.
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Article IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Bank that:
Section 4.01. Incorporation, Good Standing, and Due Qualification.
The Borrower and SLT Subsidiary, Inc. is each a corporation duly
incorporated, validly existing, and in good standing under the laws of the
jurisdictions of its incorporation; has the corporate power and authority to own
its assets and to transact the business in which it is now engaged or proposed
to be engaged in; and is duly qualified as a foreign corporation and in good
standing under the laws of each other jurisdiction in which failure to so
qualify would result in a material adverse effect on its business.
Section 4.02 Corporate Power and Authority.
The execution, delivery, and performance by the Borrower of the Loan
Documents to which each is a party have been duly authorized by all necessary
corporate action and do not and will not (1) require any consent or approval of
the stockholders of such corporation; (2) contravene such corporation's charter
or bylaws; (3) violate any provision of any law, rule, regulation (including,
without limitation, Regulations U and X of the Board of Governors of the Federal
Reserve System), order, writ, judgment, injunction, decree, determination, or
award presently in effect having applicability to such corporation; (4) result
in a breach of or constitute a default under any indenture or loan or credit
agreement or any other agreement, lease, or instrument to which such corporation
is a party or by which it or its properties may be bound or affected; (5) result
in, or require, the creation or imposition of any Lien, upon or with respect to
any of the properties now owned or hereafter acquired by such corporation; and
(6) cause such corporation to be in default under any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination, or award
or any such indenture, agreement, lease, or instrument.
Section 4.03 Legally Enforceable Agreement.
This Agreement is, and each of the other Loan Documents when delivered
under this Agreement will be, legal, valid, and binding obligations of the
Borrower, enforceable against the Borrower, in accordance with their respective
terms, except to the extent that such enforcement may be limited by applicable
bankruptcy, insolvency, and other similar laws affecting creditors' rights
generally.
Section 4.04. Financial Statements.
The balance sheet of the Borrower and its Subsidiaries, and the related
statement of income and retained earnings of the Borrower and its Subsidiaries
for the fiscal year most recently ended, and the accompanying footnotes,
together with the opinion thereon, and any interim balance sheet of the Borrower
and its Subsidiaries statement of income and retained earnings, copies of which
have been furnished to the Bank, are complete and correct and fairly present the
financial condition of the Borrower and its Subsidiaries as at such dates and
the results of the operations of the Borrower and its Subsidiaries for the
periods covered by such statements, all in accordance with GAAP consistently
applied (subject to year-end adjustments in the case of the interim financial
statements), and since those statements were provided to the Bank, there has
been no material adverse change in the condition (financial or otherwise),
business, or operations of the Borrower or any Subsidiary. There are no
liabilities of the Borrower or any Subsidiary, fixed or contingent, which are
material but are not reflected in the financial statements or in the notes
thereto, other than liabilities arising in the ordinary course of business. No
information, exhibit, or report furnished by the Borrower to the Bank in
connection with the negotiation of this Agreement contained any material
misstatement of fact or omitted to state a material fact or any fact necessary
to make the statement contained therein not materially misleading.
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Section 4.05. Labor Disputes and Acts of God.
Neither the business nor the properties of the Borrower or any Subsidiary
are affected by any fire, explosion, accident, strike, lockout or other labor
dispute, drought, storm, hail, earthquake, embargo, act of God or of the public
enemy, or other casualty (whether or not covered by insurance) materially and
adversely affecting such business properties or the operation of the Borrower or
such Subsidiary.
Section 4.06. Other Agreements.
Neither the Borrower nor any Subsidiary is a party to any indenture, loan,
or credit agreement, or to any lease or other agreement or instrument, or
subject to any charter or corporate restriction which could have a material
adverse effect on the business, properties, assets, operations, or conditions,
financial or otherwise, of the Borrower or any Subsidiary, or the ability of the
Borrower to carry out its obligations under the Loan Documents to which it is a
party. Neither the Borrower nor any Subsidiary is in default in any respect in
the performance, observance, or fulfillment of any of the obligations,
covenants, or conditions contained in any agreement or instrument material to
its business to which it is a party.
Section 4.07. Litigation.
There is no pending or threatened action or proceeding against or affecting
the Borrower or any of its Subsidiaries before any court, governmental agency,
or arbitrator which may, in any one case or in the aggregate, materially
adversely affect the financial condition, operations, properties, or business of
the Borrower or any Subsidiary or the ability of the Borrower to perform its
obligation under the Loan Documents to which it is a party.
Section 4.08. No Defaults on Outstanding Judgments or Orders.
The Borrower and its Subsidiaries have satisfied all judgments and neither
the Borrower nor any Subsidiary is in default with respect to any judgment,
writ, injunction, decree, rule, or regulation of any court, arbitrator, or
federal, state, municipal, or other governmental authority, commission, board,
bureau, agency or instrumentality, domestic or foreign.
Section 4.09. Ownership and Liens.
The Borrower and each Subsidiary have title to, or valid leasehold
interests in, all of their properties and assets, real and personal, including
the properties and assets and leasehold interest reflected in the financial
statements referred to in Section 4.04 (other than any properties or assets
disposed of in the ordinary course of business), and none of the properties and
assets owned by the Borrower or any Subsidiary and none of their leasehold
interests is subject to any Lien, except such as may be permitted pursuant to
Section 6.01 of this Agreement.
Section 4.10. Subsidiaries and Ownership of Stock.
Set forth in Schedule 4.10 is a complete and accurate list of the
Subsidiaries of the Borrower, showing the jurisdiction of incorporation of each
and showing the percentage of the Borrower's ownership of the outstanding stock
of each Subsidiary. All of the outstanding capital stock of each Subsidiary has
been validly issued, is fully paid and non-assessable, and is owned by the
Borrower free and clear of all Liens.
Section 4.11. ERISA.
The Borrower and each Subsidiary are in compliance in all material respects
with all applicable provisions of ERISA. Neither a Reportable Event nor a
Prohibited Transaction has occurred and is continuing with respect to any Plan;
no notice of intent to terminate a Plan has been filed, nor has any Plan been
terminated; no circumstances exist which constitute grounds entitling the PBGC
to institute proceedings to terminate, or appoint a trustee to administer, a
Plan, nor has the PBGC instituted any such proceedings; neither the Borrower nor
any Commonly
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Controlled Entity has completely or partially withdrawn from a Multi-employer
Plan; the Borrower and each Commonly Controlled Entity have met their minimum
funding requirements under ERISA with respect to all of their Plans, and the
present value of all vested benefits under each Plan does not exceed the fair
market value of all Plan assets allocable to such benefits, as determined on the
most recent valuation date of the Plan and in accordance with the provisions of
ERISA; and neither the Borrower nor any Commonly Controlled Entity has incurred
any liability to the PBGC under ERISA.
Section 4.12. Operation of Business.
The Borrower and its Subsidiaries possess all licenses, permits,
franchises, patents, copyrights, trademarks, and trade names, or rights thereto,
to conduct their respective businesses substantially as now conducted and as
presently proposed to be conducted, and the Borrower and its Subsidiaries are
not in violation of any valid rights of others with respect to any of the
foregoing.
Section 4.13. Taxes.
The Borrower and each of its Subsidiaries have filed all tax returns
(federal, state, and local) required to be filed and have paid all taxes,
assessments, and governmental charges and levies thereon to be due, including
interest and penalties.
Section 4.14. Debt.
Schedule 4.14 is a complete and correct list of all credit agreements,
indentures, purchase agreements, guaranties, Capital Leases, and other
investments, agreements, and arrangements presently in effect providing for or
relating to extensions of credit (including agreements and arrangements for the
issuance of letters of credit or for acceptance financing) in respect of which
the Borrower or any Subsidiary is in any manner directly or contingently
obligated; and the maximum principal or face amounts of the credit in question,
which are outstanding and which can be outstanding, are correctly stated, and
all Liens of any nature given or agreed to be given as security therefor are
correctly described or indicated in such Schedule.
Section 4.15. Environment.
The Borrower and each Subsidiary have duly complied with, and their
businesses, operations, assets, equipment, property, leaseholds, or other
facilities are in compliance with, the provisions of all federal, state, and
local environmental, health, and safety laws, codes and ordinances, and all
rules and regulations promulgated thereunder. The Borrower and each Subsidiary
have been issued and will maintain all required federal, state, and local
permits, licenses, certificates, and approvals relating to (1) air emissions;
(2) discharges to surface water or groundwater; (3) noise emissions; (4) solid
or liquid waste disposal; (5) the use, generation, storage, transportation, or
disposal of toxic or hazardous substances or wastes (intended hereby and
hereafter to include any and all such materials listed in any federal, state, or
local law, code or ordinance and all rules and regulations promulgated
thereunder as hazardous or potentially hazardous); or (6) other environmental,
health, or safety matters. A true, accurate, and complete list of all such
permits, licenses, certificates, and approvals is attached hereto as Schedule
4.15. Neither the Borrower nor any Subsidiary has received notice of, nor knows
of, or suspects facts which might constitute any violations of any federal,
state, or local environmental, health, or safety laws, codes or ordinances, and
any rules or regulations promulgated thereunder with respect to its businesses,
operations, assets, equipment, property, leaseholds, or other facilities. Except
in accordance with a valid governmental permit, license, certificate, or
approval listed in Schedule 4.15, there has been no emission, spill, release, or
discharge into or upon (1) the air; (2) soils; or any improvements located
thereon; (3) surface water or groundwater; or (4) the sewer, septic system or
waste treatment, storage or disposal system servicing the premises of any toxic
or hazardous substances or wastes at or from the premises; and accordingly
[except for inventory of raw materials, supplies, work in progress, and finished
goods listed in Schedule 4.15 that is to be used or sold in the ordinary course
of business] the premises of the Borrower and its Subsidiaries are free of all
such toxic or hazardous substances or wastes. There has been no complaint,
order, directive, claim, citation, or notice by any governmental authority or
any person or entity with respect to (1) air emissions; (2) spills, releases or
discharges to soils or improvements located thereon, surface water,
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groundwater or the sewer, septic system or waste treatment, storage or disposal
systems servicing the premises; (3) noise emissions; (4) solid or liquid waste
disposal; (5) the use, generation, storage, transportation, or disposal of toxic
or hazardous substances or waste; or (6) other environmental, health, or safety
matters affecting the Borrower or its business, operations, assets, equipment,
property, leaseholds, or other facilities. Neither the Borrower nor its
Subsidiaries have any indebtedness, obligation, or liability, absolute or
contingent, matured or not matured, with respect to the storage, treatment,
cleanup, or disposal of any solid wastes, hazardous wastes or other toxic or
hazardous substances (including without limitation any such indebtedness,
obligation, or liability with respect to any current regulation, law, or statute
regarding such storage, treatment, cleanup, or disposal) which is not shown on
Schedule 4.15.
Article V
AFFIRMATIVE COVENANTS
So long as the Note shall remain unpaid or the Bank shall have any
Commitment under this Agreement, the Borrower will:
Section 5.01. Maintenance of Existence.
Preserve and maintain, and cause each Subsidiary to preserve and maintain,
its corporate existence and good standing in the jurisdiction of its
incorporation, and qualify and remain qualified, and cause each Subsidiary to
qualify and remain qualified, as a foreign corporation in each jurisdiction in
which failure to so qualify would result in material adverse effect in its
business.
Section 5.02. Maintenance of Records.
Keep, and cause each Subsidiary to keep, adequate records and books of
account, in which complete entries will be made in accordance with GAAP
consistently applied, reflecting all financial transactions of the Borrower and
its Subsidiaries.
Section 5.03. Maintenance of Properties.
Maintain, keep, and preserve, and cause each Subsidiary to maintain, keep,
and preserve, all of its properties (tangible and intangible) necessary or
useful in the proper conduct of its business in good working order and
condition, ordinary wear and tear excepted.
Section 5.04. Conduct of Business.
Continue, and cause each Subsidiary to continue, to engage in an efficient
and economical manner in a business of the same general type as conducted by it
on the date of this Agreement.
Section 5.05. Maintenance of Insurance.
Maintain, and cause each Subsidiary to maintain, insurance with financially
sound and reputable insurance companies or associations in such amounts and
covering such risks as are usually carried by companies engaged in the same or a
similar business and similarly situated, which insurance may provide for
reasonable deductibility from coverage thereof. The Borrower shall provide at
all times a current Property Insurance Certificate (Form Accord 27) showing the
Bank as loss payee and additional insured.
Section 5.06. Compliance With Laws.
Comply, and cause each Subsidiary to comply, in all respects with all
applicable laws, rules, regulations, and orders, such compliance to include,
without limitation, paying before the same become delinquent all taxes,
assessments, and governmental charges imposed upon it or upon its property.
25
Section 5.07. Right of Inspection.
At any reasonable time and from time to time, permit the Bank or any agent
or representative thereof to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, the Borrower and
any Subsidiary, and to discuss the affairs, finances, and accounts of the
Borrower and any Subsidiary with any of their respective officers and directors
and the Borrower's independent accountants.
Section 5.08. Reporting Requirements.
Furnish to the Bank:
(1) Annual financial statements. As soon as available and in any event
within seventy five (75) days after the end of each fiscal year of the Borrower,
balance sheets of the Borrower and its Subsidiaries as of the end of such fiscal
year and statements of income and retained earnings of the Borrower and its
Subsidiaries for such fiscal year, and statements of changes in financial
position of the Borrower and its Subsidiaries for such fiscal year, all in
reasonable detail and stating in comparative form the respective figures for the
corresponding date and period in the prior fiscal year and all prepared in
accordance with GAAP consistently applied and as to the consolidated statements
accompanied by an opinion thereon acceptable to the Bank;
(2) Quarterly Financial Statements. As soon as available and any event
within forty-five (45) days after the end of each of the first three quarters of
each fiscal year of the Borrower, balance sheets of the Borrower and its
Subsidiaries as of the end of such quarter, and statements of income and
retained earnings of the Borrower and its Subsidiaries for the period commencing
at the end of the previous fiscal year and ending with the end of such quarter,
and statements of changes in financial position of the Borrower and its
Subsidiaries for the portion of the fiscal year ended with the last day of such
quarter, all in reasonable detail and stating in comparable form the respective
figures for the corresponding date and period in the previous fiscal year and
all prepared in accordance with GAAP consistently applied and certified by the
chief financial officer of the Borrower (subject to year-end adjustments);
(3) Monthly Borrowing Base Certificates and Accounts Receivable Aging.
Borrower shall provide to bank monthly Borrowing Base Certificates and accounts
receivable agings within thirty (30) days after the end of the previous month;
(4) Management letters. Promptly upon receipt thereof, copies of any
reports submitted to the Borrower or any Subsidiary by independent certified
public accountants in connection with examination of the financial statements of
the Borrower or any Subsidiary made by such accountants;
(5) Certificate of no Default. Within forty five (45) days after the end of
each of the quarters of each fiscal year of the Borrower, a certificate in
substantially the form of the attached Exhibit 5.08(5) signed by the chief
financial officer of the Borrower (a) certifying that to the best of his
knowledge no Default or Event of Default has occurred and is continuing or, if a
Default or Event of Default has occurred and is continuing, a statement as to
the nature thereof and the action which is proposed to be taken with respect
thereto, and (b) with computations demonstrating compliance with the covenants
contained in Article VII;
(6) Accountant's report. Simultaneously with the delivery of the annual
financial statements referred to in Section 5.08(1), a certificate of the
independent public accountants who audited such statements to the effect that,
in making the examination necessary for the audit of such statements, they have
obtained no knowledge of any condition or event which constitutes a Default or
Event of Default, or if such accountants shall have obtained knowledge of any
such condition or event, specifying in such certificate each such condition or
event of which they have knowledge and the nature and status thereof;
(7) Notice of litigation. Promptly after the commencement thereof, notice
of all actions, suits, and proceedings before any court or governmental
department, commission, board, bureau, agency, or instrumentality, domestic or
foreign, affecting the Borrower or any Subsidiary, which, if determined
adversely to the
26
Borrower or such Subsidiary, could have a material adverse effect on the
financial condition, properties, or operations of the Borrower or such
Subsidiary;
(8) Notice of Defaults and Events of Default. As soon as possible and in
any event within ten (10) days after the occurrence of each Default or Event of
Default, a written notice setting forth the details of such Default or Event of
Default and the action which is proposed to be taken by the Borrower with
respect thereto;
(9) ERISA reports. As soon as possible, and in any event within thirty (30)
days after the Borrower knows or has reason to know that any circumstances exist
that constitute grounds entitling the PBGC to institute proceedings to terminate
a Plan subject to ERISA with respect to the Borrower or any Commonly Controlled
Entity, and promptly but in any event within two (2) Business Days of receipt by
the Borrower or any Commonly Controlled Entity of notice that the PBGC intends
to terminate a Plan or appoint a trustee to administer the same, and promptly
but in any event within five (5) Business Days of the receipt of notice
concerning the imposition of withdrawal liability with respect to the Borrower
or any Commonly Controlled Entity, the Borrower will deliver to the Bank a
certificate of the chief financial officer of the Borrower setting forth all
relevant details and the action which the Borrower proposes to take with respect
thereto.
(10) Reports to other creditors. Promptly after the furnishing thereof,
copies of any statement or report furnished to any other party pursuant to the
terms of any indenture, loan, credit, or similar agreement and not otherwise
required to be furnished to the Bank pursuant to any other clause of this
Section 5.08;
(11) Proxy statements, etc. Promptly after the sending or filing thereof,
copies of all proxy statements, financial statements, and reports which the
Borrower or any Subsidiary sends to its stockholders, and copies of all regular,
periodic, and special reports, and all registration statements which the
Borrower or any Subsidiary files with the Securities and Exchange Commission or
any governmental authority which may be substituted therefor, or with any
national securities exchange; and
(12) General information. Such other information respecting the condition
or operations, financial or otherwise, of the Borrower or any Subsidiary as the
Bank may from time to time reasonably request.
Section 5.09. Environment.
Be and remain, and cause each Subsidiary to be and remain, in compliance
with the provisions of all federal, state, and local environmental, health, and
safety laws, codes and ordinances, and all rules and regulations issued
thereunder; notify the Bank immediately of any notice of a hazardous discharge
or environmental complaint received from any governmental agency or any other
party; notify the Bank immediately of any hazardous discharge from or affecting
its premises; immediately contain and remove the same, in compliance with all
applicable laws; promptly pay any fine or penalty assessed in connection
therewith; permit the Bank to inspect the premises, to conduct tests thereon,
and to inspect all books, correspondence, and records pertaining thereto; and at
the Bank's request, and at the Borrower's expense, provide a report of a
qualified environmental engineer, satisfactory in scope, form, and content to
the Bank, and such other and further assurances reasonably satisfactory to the
Bank that the condition has been corrected.
Section 5.10 Further Documents. The Borrower shall execute all other
agreements, affidavits, powers of attorney, pledges, assignments, conveyances,
notes, and other instruments which may be reasonably requested by Bank or its
counsel in connection with the Loan.
Section 5.11. Wholesale Lockbox. Borrower shall execute a Wholesale Lockbox
Remittance Processing Service Agreement in a form acceptable to the Bank that
will be used for the collection of the Borrower's accounts receivable payments.
Such wholesale Lockbox shall be maintained for the entire time that any
indebtedness with the Bank is outstanding, and shall be governed by the rules
and regulations of the Bank pursuant to such Wholesale Lockbox Remittance
Processing Service Agreement.
5.12. Deposit Accounts. The Borrower shall maintain all primary depository
accounts with the Bank throughout the term of the Loan.
27
5.13. Automated Sweep Line Service Agreement. Borrower shall execute an
Automated Sweep Line Service Agreement in a form acceptable to the Bank. So long
as there is no Event of Default, the Bank shall automatically sweep the Loan
account pursuant to the Automated Sweep Line Service Agreement under the terms
and conditions contained therein.
Article VI
NEGATIVE COVENANTS
So long as the Note shall remain unpaid or the Bank shall have any
Commitment under this Agreement, the Borrower will not:
Section 6.01. Liens.
Create, incur, assume, or suffer to exist, or permit any Subsidiary to
create, incur, assume, or suffer to exist, any Lien upon or with respect to any
of its properties, now owned or hereafter acquired, except:
(1) Liens in favor of the Bank;
(2) Liens for taxes or assessments or other government charges or levies if
not yet due and payable or, if due and payable, if they are being contested in
good faith by appropriate proceedings and for which appropriate reserves are
maintained;
(3) Liens imposed by law, such as mechanics', materialmen's, landlords',
warehousemen's, and carriers' Liens, and other similar Liens, securing
obligations incurred in the ordinary course of business which are not past due
for more than thirty (30) days or which are being contested in good faith by
appropriate proceedings and for which appropriate reserves have been
established;
(4) Liens under workers' compensation, unemployment insurance, Social
Security, or similar legislation;
(5) Liens, deposits, or pledges to secure the performance of bids, tenders,
contracts (other than contracts for the payment of money), leases (permitted
under the terms of this Agreement), public or statutory obligations, surety,
stay, appeal, indemnity, performance, or other similar bonds, or other similar
obligations arising in the ordinary course of business;
(6) Judgment and other similar Liens arising in connection with court
proceedings, provided the execution or other enforcement of such Liens is
effectively stayed and the claims secured thereby are being actively contested
in good faith and by appropriate proceedings;
(7) Easements, rights-of-way, restrictions, and other similar encumbrances
which, in the aggregate, do not materially interfere with the occupation, use,
and enjoyment by the Borrower or any Subsidiary of the property or assets
encumbered thereby in the normal course of its business or materially impair the
value of the property subject thereto;
(8) Liens securing obligations of a Subsidiary to the Borrower or another
Subsidiary; and
(9) Purchase-money Liens on any property hereafter acquired or the
assumption of any Lien on property existing at the time of such acquisition (and
not created in contemplation of such acquisition), or a Lien incurred in
connection with any conditional sale or other title retention agreement or a
Capital Lease; provided that
(a) Any property subject to any of the foregoing is acquired by the
Borrower or any Subsidiary in the ordinary course of its respective
business and the Lien on any such property attaches to such asset
concurrently or within ninety (90) days after the acquisition thereof;
28
(b) The obligation secured by any Lien so created, assumed, or
existing shall not exceed one hundred percent (100%) of the lesser of the
cost or the fair market value as of the time of acquisition of the property
covered thereby to the Borrower or Subsidiary acquiring the same
(c) Each such Lien shall attach only to the property so acquired and
fixed improvements thereon;
(d) The Debt secured by such Lien is permitted by the provisions of
Section 6.02 and the related expenditure is permitted under Section 7.03.
Section 6.02. Debt.
Create, incur, assume, or suffer to exist, or permit any Subsidiary to
create, incur, assume, or suffer to exist, any Debt, except:
(1) Debt of the Borrower under this Agreement or the Note;
(2) Debt described in Schedule 4.14, but no renewals, extensions, or
refinancings thereof;
(3) Debt of the Borrower subordinated on terms satisfactory to the Bank to
the Borrower's obligation under this Agreement and the Note, such approval by
the Bank not to be unreasonably withheld or delayed;
(4) Debt of the Borrower to any Subsidiary or of any Subsidiary to the
Borrower or another Subsidiary;
(5) Accounts payable to trade creditors for goods or services which are not
aged more than seventy five (75) days from the billing date and current
operating liabilities (other than for borrowed money) which are not more than
seventy five (75) days past due, in each case incurred in the ordinary course of
business, as presently conducted, and paid within the specified time, unless
contested in good faith and by appropriate proceedings;
(6) Debt of the Borrower or any Subsidiary secured by purchase-money Liens
permitted by Section 6.01(9).
Section 6.03. Mergers, Etc.
Without the prior written approval of the Bank, such approval not to be
unreasonably withheld or delayed, wind up, liquidate or dissolve itself,
reorganize, merge or consolidate with or into, or convey, sell, assign,
transfer, lease, or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to any Person, or acquire all or substantially all
of the assets or the business of any Person, or permit any Subsidiary to do so,
except that (1) any Subsidiary may merge into or transfer assets to the Borrower
and (2) any Subsidiary may merge into or consolidate with or transfer assets to
any other Subsidiary.
Section 6.04. Leases.
Create, incur, assume, or suffer to exist, or permit any Subsidiary to
create, incur, assume, or suffer to exist, any obligation as lessee for the
rental or hire of any real or personal property, unless the same does not
violate any financial covenant contained in Article VII herein.
Section 6.05. Sale and Leaseback.
Without the prior written approval of the Bank, such approval not to be
unreasonably withheld or delayed, sell, transfer, or otherwise dispose of, or
permit any Subsidiary to sell, transfer, or otherwise dispose of, any real or
personal property to any Person and thereafter directly or indirectly lease back
the same or similar property.
29
Section 6.06. Dividends.
Declare or pay any dividends; or purchase, redeem, retire, or otherwise
acquire for value any of its capital stock now or hereafter outstanding; or make
any distribution of assets to its stockholders as such whether in cash, assets,
or obligations of the Borrower; or allocate or otherwise set apart any sum for
the payment of any dividend or distribution on, or for the purchase, redemption,
or retirement of any shares of its capital stock; or make any other distribution
by reduction of capital or otherwise in respect of any shares of its capital
stock; or permit any of its Subsidiaries to purchase or otherwise acquire for
value any stock of the Borrower or another Subsidiary, unless the same does not
violate any financial covenant contained in Article VII.
Section 6.07. Sale of Assets.
Sell, lease, assign, transfer, or otherwise dispose of, or permit any
Subsidiary to sell, lease, assign, transfer, or otherwise dispose of, any of its
now owned or hereafter acquired assets (including, without limitation, shares of
stock and indebtedness of Subsidiaries, receivables, and leasehold interests),
except: (1) inventory disposed of in the ordinary course of business; (2) the
sale or other disposition of assets no longer used or useful in the conduct of
its business; and (3) that any Subsidiary may sell, lease, assign, or otherwise
transfer its assets to the Borrower.
Section 6.08. Guaranties, Etc.
Assume, guaranty, endorse, or otherwise be or become directly or
contingently responsible or liable, or permit any Subsidiary to assume,
guaranty, endorse, or otherwise be or become directly or contingently
responsible or liable (including, but not limited to, an agreement to purchase
any obligation, stock, assets, goods, or services, or to supply or advance any
funds, assets, goods, or services, or an agreement to maintain or cause such
Person to maintain a minimum working capital or net worth, or otherwise to
assure the creditors of any Person against loss) for obligations of any Person,
except guaranties by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business.
Section 6.09. Transactions With Affiliates.
Enter into any transaction, including, without limitation, the purchase,
sale, or exchange of property or the rendering of any service, with any
Affiliate, or permit any Subsidiary to enter into any transaction, including,
without limitation, the purchase, sale, or exchange of property or the rendering
of any service, with any Affiliate, except in the ordinary course of and
pursuant to the reasonable requirements of the Borrower's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Borrower or
such Subsidiary than would obtain in a comparable arm's-length transaction with
a Person not an Affiliate.
Article VII
FINANCIAL COVENANTS
So long as the Note shall remain unpaid or the Bank shall have any
Commitment under this Agreement:
Section 7.01 Traditional Cash Flow Coverage.
The Borrower shall maintain traditional cash flow coverage of 1.25X.
Traditional cash flow coverage is defined as net income plus depreciation
expense plus amortization expense plus total interest expense minus dividends
divided by the prior period current portion of long-term debt as of the
beginning of the period being measured plus interest expense.
Section 7.02. Interest Coverage.
The Borrower shall maintain interest coverage of 2.25X. Interest coverage
is defined as net income plus depreciation expense plus amortization expense
divided by total interest expense.
30
Section 7.03. Leverage Ratio.
The Borrower shall maintain at all times a ratio of total Debt to tangible
net worth of not more than 0.50 to 1.
Article VIII
EVENTS OF DEFAULT
Section 8.01. Events of Default. The following shall constitute Events of
Default under this Agreement:
(a) if the Borrower shall fail to pay to the Bank when due the principal or
interest on the Loan or any other sum due under this Agreement or any of the
other Loan Documents and such default shall continue unremedied for a period of
ten (10) days; or
(b) if in the judgment of the Bank the proceeds of the Loan or any part
thereof are being, or shall at any time have been, diverted to a purpose other
than those permitted hereunder; or
(c) if the Borrower fails to comply with any provision of Article VI; or
(d) if the Borrower fails to comply with any of the other provisions of
this Agreement, or of the Note, or other Loan Documents and such default shall
continue unremedied for a period of thirty (30) days after notice thereof,
except that no such notice need be given for any violation of the provisions of
Sections 5.08(3), 5.08(5), or Article VII herein; or
(e) if any statement, representation or warranty contained herein or any of
the other Loan Documents or in any report, certificate or other instrument
delivered to the Bank under this Agreement shall be untrue in any material
respect at the time it was made; or
(f) if the Borrower conveys or further encumbers all or any part of the
Collateral, without the prior written consent of the Bank; or
(g) if any lien, statement of lien or suit to enforce a lien is filed
against any of the Collateral and the Borrower fails to have such lien satisfied
or suit dismissed or to secure the payment of the amount claimed by such lien,
statement of lien or suit by bond, letter of credit or other security
satisfactory to the Bank, within thirty (30) days of the day: (1) such lien or
statement of lien is filed in the office of the Judge of Probate of the county
in which the Real Estate is located; or (2) such suit is filed in court; or
(h) if any Obligor fails to pay such Obligor's debts generally as they come
due, or if a receiver, trustee, liquidator or other custodian is appointed for
any Obligor or for any of the property of any Obligor, or if a petition in
bankruptcy (whether for liquidation, reorganization, arrangement, wage earner's
plan or otherwise) is filed by or against any Obligor or if any Obligor applies
for the benefits of, or takes advantage of, any law for relief of debtors, or
enters into an arrangement or composition with, or makes an assignment for the
benefit of, creditors; or
(i) if the Borrower or SLT Subsidiary, Inc. becomes insolvent or dissolves;
or
(j) if any other Event of Default occurs under the Note or any other
security Document.
8.02. Remedies.
Upon the happening of any Event of Default hereunder, and after any notice
and right to cure as provided in Section 8.01 hereof, the Bank may at its option
take any or all of the following actions; (a) declare the total outstanding
amount of the Loan and all other indebtedness, obligations and liabilities of
the Borrower to the Bank, whether now existing or hereafter incurred, contracted
or arising, immediately due and payable; (b) declare the Note in default and
foreclose any other of the Security Documents in such manner as provided for
therein and by applicable law; and (c) exercise any other remedies or rights
which the Bank may have hereunder, under any other instruments executed in
connection with this Loan or under applicable law. For the purposes set forth in
this Section
31
8.02, the Borrower hereby constitutes and appoints the Bank its true and lawful
attorney-in-fact, with full power of substitution in the premises. This power of
attorney shall be deemed to be a power coupled with an interest and cannot be
revoked. In addition to the other remedies set forth above, during the
continuation of any event which upon notice or lapse of time or both would
become an Event of Default, the Bank shall have no obligation to make any
further advances of the Loan hereunder.
Article IX
MISCELLANEOUS
Section 9.01. Amendments, Etc.
No amendment, modification, termination, or waiver of any provision of any
Loan Document to which the Borrower is a party, nor consent to any departure by
the Borrower from any Loan Document to which it is a party, shall in any event
be effective unless the same shall be in writing and signed by the Bank, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.
Section 9.02. Notices.
When any notice is required or permitted to be given in connection with
this Agreement, such notice shall be given by delivering it to the other party
at the address set forth below or by depositing it in the United States mail
(either certified mail or registered mail), postage prepaid and addressed as
follows, or to such other address of which either party may give the other
notice as provided herein:
to the Borrower:
Surgical Laser Technologies, Inc.
000 Xxxxxxxx Xxxxx
Xxxxxxxxxxxxxxx, XX 00000
Attn: President
with a copy to:
Xxxxx Xxxxxxxx, Esq.
00 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
to the Lender:
AmSouth Bank
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Commercial Loan Department
Section 9.03. No Waiver.
No failure or delay on the part of the Bank in exercising any right, power,
or remedy hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power, or remedy preclude any other or
further exercise thereof or the exercise of any other right, power, or remedy
hereunder. The rights and remedies provided herein are cumulative, and are not
exclusive of any other rights, powers, privileges, or remedies, now or hereafter
existing, at law or in equity or otherwise.
32
Section 9.04. Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
Borrower and the Bank and their respective successors and assigns, except that
the Borrower may not assign or transfer any of its rights under any Loan
Document to which the Borrower is a party without the prior written consent of
the Bank.
Section 9.05. Costs, Expenses, and Taxes.
The Borrower agrees to pay on demand all costs and expenses incurred by the
Bank in connection with the preparation, execution, delivery, filing, and
administration of the Loan Documents, and of any amendment, modification, or
supplement to the Loan Documents, including, without limitation, the fees and
out-of-pocket expenses of counsel for the Bank incurred in connection with
advising the Bank as to its rights and responsibilities hereunder. The Borrower
also agrees to pay all such costs and expenses, including Bank's attorney fees
and court costs, incurred in connection with enforcement of the Loan Documents,
or any amendment, modification, or supplement thereto, whether by negotiation,
legal proceedings, or otherwise. In addition, the Borrower shall pay any and all
stamp and other taxes and fees payable or determined to be payable in connection
with the execution, delivery, filing, and recording of any of the Loan Documents
and the other documents to be delivered under any such Loan Documents, and
agrees to hold the Bank harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omitting to pay such taxes
and fees. This provision shall survive termination of this Agreement.
Section 9.06. Integration.
This Agreement and the Loan Documents contain the entire agreement between
the parties relating to the subject matter hereof and supersede all oral
statements and prior writings with respect thereto. If there exists any
discrepancy in the interpretation of any terms or conditions contained in this
Agreement or any of the Loan Documents or Security Documents, then, to the
extent necessary, this Agreement shall control.
Section 9.07. Indemnity.
The Borrower hereby agrees to defend, indemnify, and hold the Bank harmless
from and against any and all claims, damages, judgments, penalties, costs, and
expenses (including attorney fees and court costs now or hereafter arising from
the aforesaid enforcement of this clause) arising directly or indirectly from
the activities of the Borrower and its Subsidiaries, its predecessors in
interest, or third parties with whom it has a contractual relationship, or
arising directly or indirectly from the violation of any environmental
protection, health, or safety law, whether such claims are asserted by any
governmental agency or any other person. This indemnity shall survive
termination of this Agreement.
Section 9.08 Governing Law.
This Agreement and the Note shall be governed by, and construed in
accordance with, the laws of the State of Alabama.
Section 9.09. Severability of Provisions.
Any provision of any Loan Document which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions of such Loan Document or affecting the validity or enforceability of
such provision in any other jurisdiction.
33
Section 9.10. Headings.
Article and Section headings in the Loan Documents are included in such
Loan Documents for the convenience of reference only and shall not constitute a
part of the applicable Loan Documents for any other purpose.
Section 9.11. Jury Trial Waiver.
THE BANK AND THE BORROWER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION,
PROCEEDING, CLAIM, OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN
EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE LOAN
DOCUMENTS. NO OFFICER OF THE BANK HAS AUTHORITY TO WAIVE, CONDITION, OR MODIFY
THIS PROVISION.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
Attest: SURGICAL LASER TECHNOLOGIES, INC.
By: /s/ Xxxxx Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------- ------------------------------------
Xxxxx Xxxxxxxx, Secretary Xxxxxxx X. Xxxxxxx, President and CEO
By: /s/ Xxxxx Xxxxxxxx By: /s/ Xxxxx X. Xxxxx
--------------------------------- ------------------------------------
Xxxxx Xxxxxxxx, Secretary Xxxxx X. Xxxxx, Controller/Treasurer
AMSOUTH BANK
By: /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------- ------------------------------------
Its: Paralender Its: Vice President
34
Schedule 4.14
Attached to Revolving Loan Agreement
Dated 5/31/00
Outstanding debt of the Company as of May 7, 2000 is as follows. All debt is in
the form of capital leases.
Lessor Total Outstanding Maturity Date
------ ----------------- -------------
Pitney Xxxxx Credit Corporation $19,610 November 2002
KCI Financial Services $32,193 November 2000
Cura Capital $33,008 August 2000
35
Schedule 4.15
Attached to Revolving Loan Agreement
Dated 5/31/00
None
36
EXHIBIT 5.08 (5)
SURGICAL LASER TECHNOLOGIES, INC.
CERTIFICATE OF CHIEF FINANCIAL OFFICER
The undersigned, the Chief Financial Officer of Surgical Laser
Technologies, Inc., a Delaware corporation ("Borrower") hereby (a) delivers this
Certificate pursuant to Section 5.08 (5) of that certain Revolving Loan
Agreement ("Loan Agreement") dated as of May 31, 2000, by and between Borrower
and AmSouth Bank, NA ("Bank"), and (b) certifies to Bank, with the knowledge and
intent that Bank may, without any independent investigation, rely fully on the
matters herein in connection with the Loan Agreement, as follows:
1. Attached hereto as Schedule I are the financial statements of Borrower
----------
as of and for the Fiscal Year Fiscal Quarter
------------ -----------
(check one) ended , 20 .
------------------- -------
2. Such financial statements are true and correct in all material
respects, have been prepared on a consistent basis in accordance with
GAAP (except as otherwise noted therein) and fairly present the
financial condition of Borrower as of the date indicated therein and
the results of operations for the respective periods indicated therein.
3. Attached hereto as Schedule II are the results of detailed calculations
made by Borrower to establish that Borrower was in compliance with the
requirements of Article VII of the Loan Agreement on the date of the
financial statements attached as Schedule I hereto.
4. Unless otherwise disclosed on Schedule III attached hereto to the best
of the undersigned's knowledge neither a Default nor any Event of
Default has occurred and is continuing on the date hereof; provided,
that for any Default or Event of Default disclosed on Schedule III,
Borrower is taking or proposes to take the action to cure such Default
or Event of Default set forth on Schedule III.
Unless otherwise defined herein, all capitalized terms used herein
shall have the meaning given such terms in the Loan Agreement.
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate
of Chief Financial Officer as of 20, .
--------------------------- -----
SURGICAL LASER TECHNOLOGIES, INC.
By:
-------------------------------
Xxxxx Xxxxxxxx
Chief Financial Officer
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SCHEDULE I
FINANCIAL STATEMENTS OF BORROWER
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SCHEDULE II
COMPLIANCE CALCULATIONS
Section 7.01 Traditional Cash Flow Coverage (as defined)
Traditional cash flow coverage at ___________, 20__: .__________
Required amount: >= 1.25x .
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Excess: .__________
Net income .__________
Add: depreciation expense .__________
Add: amortization expense .__________
Add: total interest expense .__________
Less: dividends .__________
Total (A)
Current portion of long-term Debt as of start of period .__________
Add: interest expense .__________
Total (B)
Quotient (A ./. B), equaling Traditional Cash Flow Coverage .__________
Note 1. Debt for this calculation does not include Debt to AmSouth.
Section 7.02 Interest Coverage (as defined)
Interest coverage at ___________, 20__: .___________
Required amount: >=2.25x .
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Excess: .___________
Net income .___________
Add: depreciation expense .___________
Add: amortization expense .___________
Total (C) .___________
Total interest expense (D) .___________
Quotient (C ./. D), equaling Interest Coverage .___________
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Section 7.03 Leverage Ratio (as defined)
Leverage ratio at ._________, 20__: .___________
Required amount: .<=0.50 to 1.00.
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Excess: .___________
Indebtedness or liability for borrowed money .___________
Bonds, debentures, notes or similar instruments .___________
Obligations for purchase price, deferred beyond current period .___________
Capital leases .___________
Unfunded vested benefits under ERISA plans .___________
Letters of credit obligations .___________
Acceptance facilities obligations .___________
Guaranties, endorsements, cont. obligations to provide funds, etc. .___________
Obligations secured by Liens .___________
Total Debt (E)
Total stockholders' equity .___________
Less: intangible assets, net .___________
Tangible net worth (F) .___________
Quotient (E ./. F), equaling Leverage Ratio .___________
Note 2. Debts for this calculation should not be duplicated.
Note 3. Trade payables maturing in 12 months or over are not
Debt, nor are current accrued liabilities.
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